Wednesday, August 22, 2007

Finally, Some Reserve at the Fed

Ben Bernanke's reserved response to the credit situation seems to be working if the early returns are any indication. Instead of giving the kids the big lollipop they were asking for - the promise of a Fed Funds rate cut - he gave them something sweet but healthier in the long-term: some pineapple chunks in the form of a discount rate decrease.

After losing about 50% of our Green gains during this recent market meltdown, we're slowly clawing our way back up. Starbucks, interestingly, is back in the black today for us, and is on pace to provide 40% gains to us over the next 12 months.

Even half that would be good, and is, frankly, what I'm hoping for. This stock has been savaged even through the company has hit its earnings targets... has been opening new stores in China like mushrooms... and is actively seeking solutions to its problems (higher drink prices... more localized decor... expanded product lines).

It's hard to get excited by a couple good days for the markets here. I believe we're in for more volatility ahead, and I think the Fed rate cut is not forthcoming in September (which is fine by me).

Here's the bottom line: If you don't like this volatility, and would like to see it avoided in the future, then supporting Bernanke's laissez-faire policy at the Fed makes sense. It was Greenspan's interventionist leanings and contant, artificial stimulation of the economy that created this mess in the first place.

I think Bernanke should be lauded for his handling of this situation. I believe seeking a "dynamic stability" would be best for investors, including ourselves. In other words, you need enough stimulation and volatility in the markets to keep them from going dead (stagflation)... but not so much that stocks are forever riding a dramatic roller coaster.

THE INSPIRERS

These coast redwoods made me want to do this blog.

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Background on this Blog

I decided to write this blog after a recent visit to the place where I grew up: Northern California.During a solitary walk I took through an overwhelmingly inspiring and majestic grove of mist-enshrouded giant coast redwoods, I was struck with the idea that investing in things that didn't ruin forests, damage the planet, or defile human beings would be a great idea...

At first, I thought it sounded farfetched: a socially responsible portfolio that outperforms the markets by a clear margin.However, now I think it can be done. And with this blog - and the detailed recommendations and tracking I plan to undertake - I intend to see if I can do it.

NOTE: All material contained on this blog is presented as journalism and opinion, not advice... It's an experiement to see if our imaginary portfolios can outperform. James

My Big List of Green Stocks

If you're looking for a huge, general list of green, sustainable and socially responsible companies that have publicly listed stocks, you've found it baby. My goal is to keep building this list over time and to eventually have the biggest, longest list of green stocks on the Internet! (Keep in mind, this is a random list and if you like any of the companies here, be sure to do your due diligence before investing.)*Note: My criteria for adding a stock to this list include their being part of a green/SRI index or mutual fund... or if I personally determine that they have value as green/SRI companies...